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January 4, 2013

Morningstar Announces Fund Managers of the Year

Surprise and two new categories mark the best managers of 2012

Morningstar announced its 2012 U.S. Fund Manager of the Year award winners on Thursday after releasing a slow tease of nominees prior to the Christmas holiday. According to the Chicago-based research firm, the awards acknowledge managers who “not only delivered impressive performance in 2012, but also excellent long-term risk-adjusted returns, and who have been good stewards of fund shareholders’ capital.”

In its announcement, Morningstar writes that that Mairs & Power Growth, Bill Frels and Mark Henneman have produced one of the best long-term records of any large-blend fund. Since Frels became co-manager in 1999, the firm notes, the fund has beaten all but one of its large-blend category peers and trounced the S&P 500 with an 8.2% annualized gain through 2012.

Rajiv Jain has managed Virtus Foreign Opportunities since 2002, and Virtus Emerging Markets Opportunities since 2006. He follows “a high-conviction approach regardless of market trends and is willing to hold portfolios that look very different than the benchmark.” The strategy has served him well, according to Morningstar. His funds have landed in the top decile of performance for most periods under his management.

Little surprise PIMCO takes the fixed-income category. Mark Kiesel is the 10-year manager of "one of the best-performing corporate bond funds over both long- and short-term periods," according to Morningstar. The firm notes the fund has an 11.1% three-year annualized return and a 10.7% five-year annualized return.

FS Market Neutral is one of the oldest funds in the market-neutral category, according to Morningstar, with an eight-year track record and $1.8 billion in assets. In 2012, the fund achieved the highest absolute return of 7.8% in its category, and its risk-adjusted return ranked fourth.

David Giroux joined the fund in 2006, and since then has beaten 97% of moderate-allocation category peers, “delivering top-decile returns on a risk-adjusted basis. Giroux follows a straightforward asset allocation approach, generally investing 55-65% of assets in equities and the rest in a mix of fixed income and cash.” For most of his tenure, Morningstar concludes, Giroux has favored convertible bonds, and more recently, leveraged loans, in the fixed-income segment of the fund.

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